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Brokers with Negative Balance Protection 40 replies

Brokers that liquidate accounts at zero before negative balance occurs 22 replies

When would chasing a trade be worth it to you? 17 replies

What brokers would you want to use if you had 100k + million + account? 6 replies

Can someone answer question about Brokers chasing stops? 7 replies

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Brokers chasing you for negative account balance

Quoting spocktrader
Dukascopy Bank and Dukascopy Europe invite all the industry to follow the same approach to build up customers trust in the industry.
Lol, Dukas, I like your style. Capture the moral high ground and throw down the gauntlet. Admittedly this is a lot easier to do when your native currency is CHF!

For the tiny percentage of private traders that got hit, take it on the chin and manage to survive this bump with enough determination to learn and stick at it, I say 'good luck', because you are the ones that will make it.

For the gamblers and freeloaders - boy, are you lucky!
"Risk comes from not knowing what you're doing." - Warren Buffett
Quoting dsb104
Under no circumstances pay them. Let they get it from you.
+1

Best advice so far!
Quoting Greeny
{quote} Again, good post Spili, a bit of reality for some of the punters.
Thanks Greeny. Like you this comes from years of experience and the drive to understand. I started out many years ago with a practice account and not a single clue. You have to be very very honest with yourself to succeed (I'm sure you know), and very honest about what you don't know. It was only when I realised what I don't know that I was able to start tackling the problem and moving forward, but I've still got a lot to learn - if that wasn't the case I probably would have figured out a way to be long xau/eur! I can hear the options market calling to me... lol.
"Risk comes from not knowing what you're doing." - Warren Buffett
Hello everyone

I am a new trader and was unfortunate enough to get caught out on the USD/CHF. The fall took all of my account balance and has also taken me into negative balance (which I never new could happen). The broker is Gain Capital and they have sent me an email this morning I believe trying to get me to admit liability- which I do not. Any thoughts or advice would be welcome please.

We are contacting you with regards to the FOREX.com UK account referenced above.

We have been recently apprised of a possible concerning situation about the financial losses you suffered as a result of your trading activity.

Whilst we are sorry to hear of your losses, based on regulatory ‘appropriateness’ parameters we would like to remind you that FOREX and other leveraged trading can involve significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary.

In light of the above, please reply to this communication acknowledging that you are aware of the risks involved with this type of trading activity and confirming whether you wish to continue trading or close the above mentioned account.

Should you have any further questions following this communication, please do not hesitate to contact me.
Quoting Pharm0r
Keep in mind- a bankrupt broker can't afford to chase you.
They could sell your debt to others. It's a common business, they get a certain percentage of your outstanding payment and then the guys from moscow come over to chase you.

Quote
Picking up nickels in front of a bulldozer is not a winning strategy.

priceless! Thanks for that one mate.

To all the guys (or maybe its just forexia) blaming others that no one wanted to take over their loosing trade (SL), I repeated myself several times now: There are brokers with a guaranteed SL - they use an insurance to achieve that. So, if you want to pick up nickels in front of a bulldozer, that could be your knight's armor.
from CMC


Actions taken by the Swiss National Bank on 15 January 2015 in removing the euro “peg”, alongside the benchmark interest rate cut, created severe dislocation in the underlying foreign exchange market between [09:30 and 10:02 GMT][10:30 and 11:02 CET]. This resulted in little or no liquidity in the affected Swiss currency pairs, with several liquidity providers upon whom we place reliance to generate the Prices on our Platform ceasing to provide any prices during this time. These events gave rise to Circumstances Outside Our Control which impaired the ability of our Platform to quote correct Prices, resulting in Orders continuing to be accepted at incorrect Prices for the affected Swiss currency pairs. Given the circumstances we determined it fair and reasonable to take a Reserved Action by varying the Prices at which the affected trades were accepted on our Platform to reflect the correct Prices. This variation in Price was applied to all affected Accounts as a c ash adjustment which can be viewed in your Account history.
Capitalised terms used above have the meaning given to them in the Terms of Business, which are available (together with associated documentation) on the CMC Markets’ website.
What happened to pricing on CMC Markets’ trading platforms?
The prices quoted by those of our liquidity providers that were active during the period noted above became sporadic and in some cases extremely wide. To note, prices quoted by foreign exchange liquidity providers (unlike those for listed products) are only indicative and subject to rejection/re-quotes, therefore even when prices are being quoted they are not necessarily firm tradable prices reflective of the true prices (and therefore liquidity) available in the underlying foreign exchange market. Our platform published incorrect prices by failing to represent the events in the underlying financial market in which there was no liquidity.
What we did
We established the first available and tradable price (reflective of the underlying market) once the unprecedented market conditions 'normalised'.
At 10:02:54GMT three of our five banks began to publish more stable, reliable quotes which we used to calculate the adjustments referred to above.
Clients that had a Limit Order(s) trigger would have also received a cash adjustment at the first price available at 10:02:54 GMT.
In addition, any clients that were opening and closing the same position between 9.30 am and 10:02 GMT would have received a full spread rebate on either the opening or closing value that would have been generated at the time. For example:

  1. If you bought and sold 10 you would have received a full spread rebate on 10.
  2. If you bought 20 and sold 5 you would have received a full spread rebate on 5.

These cash adjustments were made to impacted client accounts at 21:32GMT on 15th January 2015.
Finally, further cash adjustments were made to client accounts at 17:48 GMT on 18th January 2015 which hadn’t been previously factored in to reflect:

  1. The correct currency conversion rate when translating any cash adjustments to the account currency; and
  2. Conversion of any realised profits and losses to the account currency between 9.30 am and 10:02:54 GMT as the currency rates during this time frame were also incorrect
  3. No clients would have suffered any further account deficits based on this recalculation as CMC Markets has decided to waive any further amounts due from the second adjustment
  4. Any clients that received a benefit from the second adjustment will see a positive cash adjustment.

If you have any further questions please contact our client management team on 020 3003 8588.
Kind regards,
CMC Markets
Tel: +44(0) 20 3003 8588
Email: [email protected]

Quoting Gunner4you12
Hello everyone I am a new trader and was unfortunate enough to get caught out on the USD/CHF. The fall took all of my account balance and has also taken me into negative balance (which I never new could happen). The broker is Gain Capital and they have sent me an email this morning I believe trying to get me to admit liability- which I do not. Any thoughts or advice would be welcome please. We are contacting you with regards to the FOREX.com UK account referenced above. We have been recently apprised of a possible...
Observe your right to silence or, as you say, you will be admitting liability which they will have on record.

Read the t&c very carefully again.

Seek legal advice.
"Risk comes from not knowing what you're doing." - Warren Buffett
Quoting r41225
{quote} Regulators (& people in government in general) don't like to think a lot, they look for easy solutions & if enough people bitch about it then even a ban on retail forex could be considered as there are enough people out there already who have gotten used to hating words like "leverage", "trading", "speculation", etc; I'm sure people like Forexia will be "protected" by the regulators then!
Well that's the regulators' problem that doesn't mean that we shouldn't do something to enforce fair dealing by the liquidity "providers". They didn't just abandon the market during the SNB crisis, there were lot more other even shadier practices that they engaged in that bucket shop market maker brokers have engaged in but are no longer engaging in like last-look re-quoting(mind you many brokers like Oanda maintained firm quotes during the whole SNB event even though they received requoting from those liquidity "providers"), unfair slippages, faking system glitches to manipulate prices that we are all too familiar with and yet those liquidity "providers" are still engaging in those practices against us and the brokers, their institutional clients. If you haven't read my previous posts, I will re-post them here:

Institutional traders and buyside members have seen an influx in banks using last look practises to overpower their clients. One trader who commented on the basis of anonymity said to Forex Magnates: “Quite simply Banks are having the biggest last look ever, typical of the market today, they enter a risk market and when it goes against them they fail to honour the trades.”

http://forexmagnates.com/banks-face-...mln-bloomberg/

In effect, what has appeared to have taken place is a massive ‘requote’ in the market. Mostly known for taking place between retail brokers and their customers, the table has been turned with brokers receiving word from banks that some of their trades with them have been cancelled. A letter to clients from one of the largest primary bank reviewed by Forex Magnates, stated that “significant issues” took place during the price drop and actual executions may not match that which was reported by their electronic systems. The result is that brokers who had filled customers, may still be on the hook for those trades with their counterparties after seeing trades with banks repriced due to initial rates ‘being out of the market’.

http://forexmagnates.com/breaking-ig...tility-in-chf/

In an extreme example (that affected at least two brokers), Barclays had filled EUR/CHF sell orders at 0.065 (no extra zero) while at the same time EBS was quoting its session low of 0.85. Technology providers that Forex Magnates spoke to corroborated with similar examples of their clients. Firms did state that Barclays and other banks ultimately did provide some price improvement, but often to levels below that of EBS’s low of the day.

http://forexmagnates.com/banks-bucke...nc-volatility/

So just because those liquidity "providers" are big, they get to get away with these s*** against us? Every time when they do this, it's our money that we are just handing to them for free since they trade against us; they didn't earn these money because they made a good trade and we made a "bad trade"; they are taking pips from us via requoting, slippages simply because they can because they are the ultimate market makers.

We monitored the bucket shop market maker brokers but who's watching the bigger market maker banks??
Make your losses in demo. Earn your profits live.
Forexia, do you accept extra gains when price gaps beyond your limit order?
Meantime, here's the real case of chasing of our FF member:

http://www.wsj.com/articles/traders-...ove-1421764310

The Saxo Bank seems has significant losses in contract with their latest statements:

http://www.bloomberg.com/news/2015-0...tal-level.html
Quoting Forexia
{quote} So just because those liquidity "providers" are big, they get to get away with these s*** against us? Every time when they do this, it's our money that we are just handing to them for free since they trade against us; they didn't earn these money because they made a good trade and we made a "bad trade"; they are taking pips from us via requoting, slippages simply because they can because they are the ultimate market makers. We monitored the bucket shop market maker brokers but who's watching the bigger market maker banks??
You don't understand, you're trying to kill the goose that lays golden eggs in the hopes that you'd get all the eggs at once! Retail forex needs banks more than they need it! It's their game, we get to play it, if you try to use force against them, they can easily take their toys & go home. Banks are in it because it's profitable for them, if it ceases to be profitable for them then they can easily go back to trading amongst themselves as they used to.

Let me ask you, would you take a trade knowing that you're very likely to make a huge loss on it? I hope not. So why do you expect banks & LPs to do that? We trade when we think we can make money & so do LPs! Why is it so hard to grasp? There's nothing unfair about that.

As far as the wrong quotes go, I believe brokers have agreements with their LPs so I'm sure brokers will deal with it, if LPs failed to meet the terms of the agreement. But YOUR agreement is with your broker, not with LPs so LPs aren't in any way obligated to you.

As far as regulations go, there's FIFO, leverage reduced to 50:1, cards not acceptable anymore & so on, haven't you had enough already? When will you learn? When retail forex is killed?
Regulations are NOT the answer, when will you get it?

As much as you're intent on (unknowingly, I hope) killing the retail forex with regulations, if you expend that much effort in revisiting the reasons why you should NOT have been long on EURCHF then you'd be a significantly better trader.
Quoting Gunner4you12
Hello everyone I am a new trader and was unfortunate enough to get caught out on the USD/CHF. The fall took all of my account balance and has also taken me into negative balance (which I never new could happen). The broker is Gain Capital and they have sent me an email this morning I believe trying to get me to admit liability- which I do not. Any thoughts or advice would be welcome please. We are contacting you with regards to the FOREX.com UK account referenced above. We have been recently apprised of a possible...
Please keep us informed of how GAIN Capital approaches your negative balance. They are one of the brokers I use, and I'm curious to know how they react to negative balances in light of other brokers resetting traders' accounts to zero. I haven't read anything in regards to them yet, so wasn't sure how they were handling the situation.
Let me jump into the discussion with a news from Swissquote. Bank representatives are calling customers asking to clear their debit balances under the threat of a legal action (first hand experience...stop loss on EURCHF did not work and my account went negative)

Last week Swissquote booked 25 millions francs as provision (loss)
http://www.reuters.com/article/2015/...0UV0DP20150116
Jan 16 (Reuters) - Online broker Swissquote said on Friday it would book a provision of 25 million Swiss francs ($24.5 million) after the surge in the value
of the currency left many of its clients out of pocket.

Stocks are -25% compared last Monday
http://www.reuters.com/finance/stock...t?symbol=SQN.S

Any other Swissquote customer to share his/her experience with this broker? Are other brokers doing the same?

Is Swissquote aware of the reputation damage they are making to themself?
FXCM Provides Further Details on Financing With Leucadia National Corporation : : http://ir.fxcm.com/releasedetail.cfm?ReleaseID=891881

I can read: "The credit agreement requires monthly payments of the term loan from proceeds received during the immediately preceding calendar month from accounts receivable related to the customer debit balances referenced above. "

looks like FXCM is going after negative balances..
I had an alpari uk account that registers now a negative balance. On the day of the peg removal I contacted alpari through their live chat service and asked what happens with the negative amounts, whether or not there is any interest and what happens in the time the balance is not leveled to 0 (money is not returned). Two different people of their staff told me that 1. alpari will ask customers to pay back money 2. there is no interest on negative balance 3. not repaying the amount only does not allow you to utilize the account.

I wonder how they are going to chase thousands of small retail customers outside the UK since I think that chasing those small amounts abroad might cost even more than the amounts chased.
Quoting Nacho
I had an alpari uk account that registers now a negative balance. On the day of the peg removal I contacted alpari through their live chat service and asked what happens with the negative amounts, whether or not there is any interest and what happens in the time the balance is not leveled to 0 (money is not returned). Two different people of their staff told me that 1. alpari will ask customers to pay back money 2. there is no interest on negative balance 3. not repaying the amount only does not allow you to utilize the account. I wonder how they...
Kinda begs the question...

How small would the smallest loss actually be?

And were people playing a single instrument or adding in on the Multiple Swiss Crosses?

At close to 3k(ish) for micros, It'd be worth it to suit up Guido and a couple of cappers to go out n bust some ass in a collection-mobile...that is, dependent on how much the retailer had in his/her account prior to the exodus. OSB.

Nano accounts...well, shit, that don't even hit the open market, so you know that's all gunna wash.
Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
Quoting RudiMar
FXCM Provides Further Details on Financing With Leucadia National Corporation : : http://ir.fxcm.com/releasedetail.cfm?ReleaseID=891881 I can read: "The credit agreement requires monthly payments of the term loan from proceeds received during the immediately preceding calendar month from accounts receivable related to the customer debit balances referenced above. " looks like FXCM is going after negative balances..
That's straight from their risk disclaimer "Although the margin call feature is designed to close positions when account equity falls below the margin requirements, there may be instances when liquidity does not exist at the exact margin call rate. As a result, account equity can fall below margin requirements at the time orders are filled, even to the point where account equity becomes negative. This is especially true during market gaps or volatile periods. FXCM will not hold traders responsible for deficit balances in this scenario, but clients should be cognizant that all funds on deposit in an account are subject to loss. FXCM also recommends that traders use Stop orders to limit downside risk in lieu of using a margin call as a final stop."

How can they possibly spin that and claim that traders owe money on the negative balances? It's getting interesting to see how that unfolds.
Quoting Nacho
I wonder how they are going to chase thousands of small retail customers outside the UK since I think that chasing those small amounts abroad might cost even more than the amounts chased.
The insolvency administrator will not forgive the negative balance, his duty is to gather as much as possible to distribute to creditors.

They will most likely sell the claim on negative customer accounts to money collection firms for cents on the dollar. And these guys usually dont take prisoners, they will squeeze out as much as possible from the debtors.
Quoting shrike
{quote} The insolvency administrator will not forgive the negative balance, his duty is to gather as much as possible to distribute to creditors. They will most likely sell the claim on negative customer accounts to money collection firms for cents on the dollar. And these guys usually dont take prisoners, they will squeeze out as much as possible from the debtors.
surely, then it would be better to cut a deal with each customer for 10's of cents on the dollar
Quoting shrike
{quote} The insolvency administrator will not forgive the negative balance, his duty is to gather as much as possible to distribute to creditors. They will most likely sell the claim on negative customer accounts to money collection firms for cents on the dollar. And these guys usually dont take prisoners, they will squeeze out as much as possible from the debtors.
To sell the debt to collection agency, fxcm will need to win their case in court. If somebody owes you money, you first talk to that person and try to figure things out. If you don't get what you claim is yours you then proceed to court. And only if you win the case you call the collection agencies and try to cut a deal with them to buy the debt from you. FXCM can claim that traders owe them money but if people dispute that and refuse to pay, the next step will be court, not collection agency people knocking on traders' doors.
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